Buying Land in the Cayman Islands as an Investment Strategy
Buying raw land in the Cayman Islands is a popular way to get onto the Caribbean property investment ladder, with minimal red tape and a lower entry cost than other forms of property investment.
As with all property transactions in the Cayman Islands, when you buy a plot of land here the title is backed by the government through its Land Registry. Every property is registered under a unique block and parcel number, guaranteeing the accuracy of the entries recorded at Lands. This sort of peace of mind is uncommon in many Caribbean jurisdictions and is a major driver of Cayman Islands real estate with foreign investors.
And then there is the Cayman Islands’ well-known investor-friendly and tax-neutral status, where there are no annual property taxes, no capital gains tax, no income or inheritance tax, and no restrictions on foreign ownership (you can own up to three properties in your own name).
But probably the most attractive thing about buying a parcel of Cayman Islands land is the complete absence of holding costs, meaning you can leave a piece of land undeveloped for as long as you like, without penalty. Unless stipulated within the covenants for a particular development, there are no time deadlines for building on raw land.
With no taxes, ongoing fees, or penalties, owning raw land in Cayman is a solid and hassle-free investment. You have the option to build whenever you are ready or sell the land for a profit at any time.
This sort of flexibility, where your decision to sell or develop is completely at your own convenience, helps make for a secure and worry-free investment. Any planning approvals on the land are valid for five years following the grant of planning permission.
Due diligence is a crucial step in any business transaction and buying land in the Cayman Islands is no exception. You want to make sure that the land you’re considering can be used for its intended purpose, particularly if there are zoning regulations and any other restrictions, such as boundary setbacks and densities, that may affect your plans.
All land is definitely not created equal, so check if there are any public access issues, or if you need to negotiate ingress and egress rights through a neighboring property. Look at whether utilities are available, and whether you need to include infrastructure costs for water, electricity, sewage, access roads, etc., into your business plan for the property.
The quality and makeup of the soil and substructure of a vacant piece of land will determine whether expensive pilings or piers will be needed to build on the site or whether more economic footings will be sufficient.
It’s not just a desirable location that will determine the value and potential profitability of a piece of land, you will also need to look into potential issues such as the elevation, given the low-lying nature of land in the Cayman Islands and the potential for flooding and damage by wind, waves, and erosion during storms — particularly in beachfront areas.
With careful research and some planning, a good return on investment is highly achievable when purchasing raw land here, and for many people, it can be a low-cost entry to the Cayman Islands property market that doesn’t require a bank loan or mortgage.
It’s also a low-maintenance investment, with no buildings to look after or tenants to manage, that can be banked for as long as you want, until you’re ready to develop or sell. And remember, no more land is being made, so as the population grows the need for land will only increase — which can only be good for your investment.
